Financial Regulatory Forum

BNP’s ‘huge’ role in undermining U.S. Sudan sanctions behind looming tough penalty, sources say

By Brett Wolf, Compliance Complete ST. LOUIS, June 18 – The pivotal role BNP Paribas played in helping Sudan sell oil in violation of U.S. sanctions is the major reason U.S. authorities are pushing for harsh penalties against the French banking giant, two sources with firsthand knowledge of the matter said.”BNP basically was the Sudanese economy. They were just huge in helping the government of Sudan evade U.S. sanctions,” one of the sources said.BNP’s role involved removing references to Sudanese parties from wire-transfer messages, so U.S. dollar oil payments could clear through New York and move into accounts controlled by Khartoum, the sources said. The sources declined to name the buyers of the Sudanese oil or to say what Khartoum did with the revenue.

The dollar is the primary currency for the global oil trade.

The prohibited transactions ran into the “many billions of dollars,” and their “sheer volume” weakened the U.S. sanctions from 2002 and “well beyond 2009,” the other source said. He added that the sums involved and the damage to sanctions “factored into the mix” as authorities calculated the approximate size of the penalty that would be demanded from the bank.

When asked whether U.S. authorities plan to pursue criminal charges against any current or former BNP executives, one of the sources said such decisions will not be made until after the case against the bank has been resolved. “That’s something that is being looked at closely,” the source said.

Both sources spoke on condition of anonymity because they were not authorized to discuss the matter.

U.S. prosecutors have been pushing the bank to plead guilty to unspecified criminal charges as part of a resolution that is expected to include a multi-billion dollar penalty, sources have said. Neither source cited above was willing to say precisely how much U.S. authorities have sought during the continuing negotiations. Reuters has reported a figure of $10 billion.

SEC is watching, on the Web, for sanctions evaders

Feb. 25 (Westlaw Business) Big Brother has his eye on more than just filings: He is also surfing the Web to corroborate corporate disclosures. Staff correspondence filed by Scottsdale-based Hypercom Corp. shows that when it comes to rooting out potential sanctions-evaders in Iran and Syria, the Securities and Exchange Commission keeps close tabs. (more…)

Lloyds Bank in $217 million settlement with U.S.

WASHINGTON, Dec 22 (Reuters) – Britain’s Lloyds TSB Bank Plc reached a $217 million settlement of charges it violated U.S. sanctions regulations, the Treasury Department said on Tuesday.

The department’s Office of Foreign Assets Control said the settlement concerned the bank’s manipulation and deletion of information about U.S. sanctioned parties in wire transfer instructions routed through third-party banks in the United States.

The settlement follows charges Lloyds faked records so clients from restricted countries, including Iran, could do business with it.

Credit Suisse to pay $536 million for U.S. violations

By James Vicini and Dan Margolies

WASHINGTON, Dec 16 (Reuters) – Swiss banking giant Credit Suisse Group AG will pay $536 million for failing to comply with U.S. laws, including Iran sanctions violations, according to U.S. court documents filed on Wednesday.

The documents outlined the violations and the settlement, which is known as a deferred prosecution agreement, that ended a five-year investigation.

Later on Wednesday, Manhattan District Attorney Robert Morgenthau plans to announce a deferred prosecution agreement with Credit Suisse, “in which the Swiss bank admits to violating New York State law by falsifying the records of New York financial institutions,” his office said.

U.S. sanctions-violation fine for Credit Suisse raises Iran alarm

By Lisa Jucca and Steve Slater

ZURICH/LONDON, Dec 16 (Reuters) – A surprise $536 million settlement by Credit Suisse to a U.S. probe over financial dealings with Iran should only do short-term damage to the Swiss bank, but others could now be in the line of fire.

Credit Suisse said late on Tuesday it was in advanced talks over a settlement to a U.S. investigation into payments made between 2002 and 2007 involving countries and entities hit by U.S. economic sanctions. A person familiar with the issue said the probe related to dealings with Iran.

The Financial Times said U.S. authorities are believed to be investigating nine banks in relation to Iran, without citing sources.

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